SENNA

EU Must Embrace AI or Risk Stagnation, Warns Draghi

Brussels - The European Union risks a future of stagnation unless it rapidly closes the technology gap with the United States and China, former European Central Bank President Mario Draghi has warned.

In a stark message, Draghi urged the EU to avoid "erecting barriers to innovation and its adoption" as it did with previous digital revolutions. Last year, the U.S. produced 40 major AI models compared to just 3 in the EU, he noted in a speech at Milan's Polytechnic University.

"If we do not bridge this divide and adopt these technologies on a large scale, Europe risks a future of stagnation with all its consequences," Draghi said. The comments underscore growing concerns that Europe is falling behind in the global race for technological supremacy, with implications for its long-term economic competitiveness.

Draghi, who also served as Italian Prime Minister, said the EU had shifted from being a continent that embraced new technologies to one that has "progressively erected barriers to innovation and its adoption." This pattern is now repeating with the AI revolution, he warned.

Beyond AI, Draghi said the EU lags the U.S. and China in other frontier technologies like biotechnology, advanced materials and nuclear fusion, where "numerous significant innovations and private investments" are occurring outside Europe.

The comments come as the EU seeks to strike a balance between harnessing the benefits of AI while addressing ethical and privacy concerns. Policymakers are finalizing the bloc's landmark AI Act, which aims to regulate high-risk AI applications.

However, Draghi cautioned that the EU must not make the same mistakes as with previous digital disruptions. "We cannot afford to raise walls, as we have done in the past," he said.

The warning echoes concerns raised by industry groups and technology leaders, who argue overly restrictive rules could hamper innovation and put European firms at a disadvantage.

Analysts say the stakes are high, with AI set to transform industries from finance to healthcare in the coming years. Private equity firm GI Partners, for example, has been investing heavily in AI-enabled software companies that it believes will be "foundational" to the digital economy.

"If Europe falls behind, it will struggle to maintain its global influence and prosperity," Draghi cautioned. "The cost of inaction is simply too high."